Larsen & Toubro Q4 profit, revenue rise 10% each but miss Street expectations

Engineering and construction major Larsen & Toubro Ltd on Thursday said that its fourth-quarter consolidated profit after tax rose 9.95% to Rs 3,620.29 crore from Rs 3,292.81 crore a year earlier. 

Consolidated revenue from operations also rose 10% from a year earlier, to Rs 52,851 crore for the three months ended March 2022. International sales at Rs 17,550 crore make up 33% of the revenue. 

Both profit and revenue missed analysts’ predictions. The company was expected to report a profit of around Rs 3,900-4,000 crore and revenue of more than Rs 53,000 crore for the quarter.

The company said it bagged orders worth Rs 73,941 crore during the quarter ended March 31, 2022, up 46% from a year earlier. The infrastructure segment booked a mega order from the Middle East, it said.

The company board has recommended a final dividend of Rs 22 per equity share, an increase of 22% per share over the previous year.

Other key highlights

1) Operating profit margin for Q4 came in at 12.34%, compared with 11.45% in the December quarter and 13.29% in the year-ago quarter.

2) The net profit margin came in at 6.85%, compared with 5.19% in the December quarter and 6.85% in the year-ago quarter.

3) L&T said it bagged orders worth Rs 73,491 crore during the quarter ended March 2022, a rise of 46% on a year-on-year basis.

4) International orders stood at Rs 32,241 crore during the quarter, comprising 44% of the total order inflow.

5) The consolidated order book of the group was at record Rs 357,595 crore as on March 31, 2022, with international orders having a share of 27%.

Company commentary

L&T said that fluctuations in crude oil and other commodity prices are leading to high input prices for industries and consumers. "The resultant supply chain disruptions could pose a threat to the growth plans of the country in the short-term," the company said. 

The engineering conglomerate said it continues to focus on winning targeted orders in its EPC space, efficient execution of its large order book and capturing the growth momentum in the technology services portfolio.

It said a robust order book, strong balance sheet, a well-diversified business portfolio and proven execution capabilities will enable the company to steer through the current challenging environment while retaining its leadership position.